TechFlow, July 11 — Davis Polk & Wardwell LLP, representing Grayscale, sent a letter to the SEC on July 8 arguing that its Digital Large Cap Fund should be considered automatically approved as of July 2. Under Section 19(b)(2) of the Securities Exchange Act, the SEC must issue a final decision within 240 days after a proposal is published, or the proposal is deemed approved by default. Although the SEC initially approved and then suspended the proposal on July 1, Grayscale's legal counsel maintains that the SEC’s internal Rule 431(e) cannot override the statutory deadline set by Congress. The letter stated that the delay has already harmed Grayscale, exchanges, and investors, and urged the SEC to promptly allow the fund to launch.
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